Facebook misses revenue forecast in Q3 2021 amidst whistleblower fiasco

As Facebook, which may rebrand itself soon, is reeling from the lashback caused by the whistleblower and the Facebook papers, it’s finances may be struggling a bit. The company missed the revenue forecast in Q3 2021, coming up short on the top end of expected revenue.

After the announcement, the company’s shares rose by a slight margin.

Facebook reported that it had clocked $29.01 billion in total revenue (a year-over-year increase of 35%), against estimates of $29.5 billion, and earnings per share of $3.22 (on a diluted basis), against estimates of $3.19 per share (a year-over-year rise of 19%). Additionally, Facebook’s daily active users (DAU) came at 1.93 billion (the same as the estimate) while its monthly active users (MAU) fell a little short of the estimated 2.93 billion to come to 2.91 billion. The average revenue per user came at $10, short of the expected $10.15.

Facebook also reported an operating margin of 36% and an effective tax rate of 13% for the third quarter of the year. Finally, its cash and cash equivalents and marketable securities came at $58.08 billion during Q3 2021.

Facebook said that it will be adding $50 billion to its stock buyback program, and provided guidance for the final quarter of the year, including revenues that will be within the range of $31.5 billion and $34 billion. It added that it expects total expenses in 2021 to be in the range of $70-71 billion, while its full-year 2022 total expenses will be in the range of $91-97 billion and would be driven by investments in technology and product talent and infrastructure-related costs.

Similarly, Facebook expects its capital expenditures in the year to come at nearly $19 billion and $29-34 billion in 2022. The company added that its outlook reflected “significant uncertainty” it faces from Apple’s iOS 14 changes and macroeconomic and COVID-related factors.

Speaking more on its plans for the final quarter of the year, Facebook said that it would be breaking its Reality Labs, or FRL, as a separate reporting segment, and would be dedicating more resources towards its AR and VR products and services. This means that Facebook will have two segments from the next quarter.

The first segment, Facebook’s Family of Apps, will include earnings from Facebook, Instagram, and WhatsApp, while the second segment, Facebook’s Reality Labs, will include augmented and virtual reality-related hardware, software and content. The company expects that its investment in FRL will reduce its overall operating profit in 2021 by approximately $10 billion.

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